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Counterpoint Mutual Funds LLC cut its holdings in shares of Arista Networks, Inc. (NYSE:ANET – Free Report) by 68.4% in the third quarter, according to its most recent disclosure with the Securities and Exchange Commission (SEC). The firm owned 1,420 shares of the technology company’s stock after selling 3,078 shares during the period. Counterpoint Mutual Funds LLC’s holdings in Arista Networks were worth $289,000 as of its most recent filing with the Securities and Exchange Commission (SEC).

A number of other institutional investors and hedge funds also recently added to or reduced their stakes in the business. ABS Investment Management LLC acquired a new position in shares of Arista Networks in the 2nd quarter valued at about $29,000. ABS Direct Equity Fund LLC purchased a new stake in shares of Arista Networks in the second quarter worth about $29,000. Kelleher Financial Advisors purchased a new stake in shares of Arista Networks in the second quarter worth about $31,000. Cornerstone Financial Management LLC grew its holdings in Arista Networks by 61.9% during the second quarter. Cornerstone Financial Management LLC now owns 183 shares of the technology company’s stock worth $31,000 after acquiring an additional 70 shares during the period. Finally, Sankala Group LLC acquired a new stake in Arista Networks during the fourth quarter worth about $27,000. 82.47% of the stock is currently owned by institutional investors and hedge funds.

Shares of Arista Networks stock opened at $182.88 on Tuesday. Arista Networks, Inc. has a twelve month low of $114.52 and a twelve month high of $217.41. The business has a 50-day moving average price of $198.29 and a 200 day moving average price of $175.18. The firm has a market cap of $230.65 billion, a PE ratio of 56.01, a P/E/G ratio of 2.06 and a beta of 1.60.

Arista Networks (NYSE:ANET – Get Free Report) last issued its quarterly earnings results on Tuesday, August 4th. The technology company reported $1.02 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.89 by $0.13. The company had revenue of $3.04 billion for the quarter, compared to the consensus estimate of $2.83 billion. Arista Networks had a return on equity of 30.65% and a net margin of 38.37%. Arista Networks’s revenue for the quarter was up 37.7% on a year-over-year basis. During the same quarter in the prior year, the business posted $0.73 earnings per share. Arista Networks has set its Q3 2026 guidance at 1.060-1.080 EPS. On average, sell-side analysts expect that Arista Networks, Inc. will post 3.79 EPS for the current year.
Wall Street Analysts Forecast Growth
ANET has been the subject of several recent research reports. Truist Financial lifted their price target on Arista Networks from $175.00 to $234.00 and gave the company a “buy” rating in a research report on Wednesday, August 5th. TD Cowen upped their price objective on Arista Networks from $210.00 to $250.00 and gave the stock a “buy” rating in a research report on Wednesday, August 5th. Jefferies Financial Group set a $250.00 price objective on shares of Arista Networks in a research note on Wednesday, August 5th. Rosenblatt Securities raised their price objective on shares of Arista Networks from $210.00 to $280.00 and gave the stock a “buy” rating in a research note on Wednesday, August 5th. Finally, Evercore reaffirmed an “outperform” rating on shares of Arista Networks in a report on Wednesday, October 7th. Two research analysts have rated the stock with a Strong Buy rating, twenty have issued a Buy rating and two have assigned a Hold rating to the company. Based on data from MarketBeat.com, the stock presently has a consensus rating of “Buy” and an average target price of $235.45.

Check Out Our Latest Report on ANET

Insiders Place Their Bets
In other news, insider Kenneth Duda sold 17,333 shares of the company’s stock in a transaction that occurred on Monday, September 21st. The stock was sold at an average price of $203.50, for a total transaction of $3,527,265.50. Following the completion of the transaction, the insider directly owned 12,976 shares of the company’s stock, valued at $2,640,616. This represents a 57.19% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, major shareholder Andreas Bechtolsheim sold 300,000 shares of the stock in a transaction that occurred on Thursday, September 17th. The shares were sold at an average price of $198.95, for a total value of $59,685,000.00. Following the transaction, the insider owned 180,543,048 shares in the company, valued at $35,919,039,399.60. This trade represents a 0.17% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders sold 3,584,116 shares of company stock valued at $733,396,013. 2.70% of the stock is owned by insiders.

Arista Networks Profile
(Free Report)

Arista Networks, Inc develops and sells cloud networking solutions for data centers, cloud service providers, enterprises and specialized computing environments. The company’s products are designed to support high-performance, scalable and automated networks used for cloud computing, artificial intelligence, data analytics and other demanding applications.

Arista’s portfolio includes data center and campus switches, routing platforms, wireless networking products, network operating software and network management tools.

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Annex Advisory Services LLC grew its position in shares of Arista Networks, Inc. (NYSE:ANET – Free Report) by 1,112.5% during the third quarter, according to its most recent disclosure with the Securities and Exchange Commission. The institutional investor owned 39,114 shares of the technology company’s stock after purchasing an additional 35,888 shares during the quarter. Annex Advisory Services LLC’s holdings in Arista Networks were worth $7,963,000 as of its most recent SEC filing.

Several other institutional investors and hedge funds also recently made changes to their positions in ANET. Cantor Fitzgerald Investment Advisors L.P. acquired a new stake in Arista Networks during the third quarter worth approximately $64,581,000. Halbert Hargrove Global Advisors LLC increased its stake in shares of Arista Networks by 22,205.9% in the 3rd quarter. Halbert Hargrove Global Advisors LLC now owns 7,584 shares of the technology company’s stock valued at $1,544,000 after acquiring an additional 7,550 shares in the last quarter. Daytona Street Capital LLC acquired a new position in shares of Arista Networks during the 3rd quarter valued at $54,000. Milestone Asset Management LLC lifted its position in shares of Arista Networks by 167.8% during the 3rd quarter. Milestone Asset Management LLC now owns 52,776 shares of the technology company’s stock valued at $10,745,000 after acquiring an additional 33,071 shares during the period. Finally, Ellsworth Advisors LLC lifted its position in shares of Arista Networks by 204.3% during the 3rd quarter. Ellsworth Advisors LLC now owns 142,772 shares of the technology company’s stock valued at $29,067,000 after acquiring an additional 95,851 shares during the period. Institutional investors and hedge funds own 82.47% of the company’s stock.

Arista Networks News Roundup Here are the key news stories impacting Arista Networks this week:

Positive Sentiment: BNP Paribas Exane upgraded Arista Networks to “strong buy,” providing a favorable analyst signal for the stock. Ticker Report article Positive Sentiment: A hammer chart pattern suggests ANET may have found technical support after its recent pullback. The article also cites broad upward revisions to Wall Street earnings estimates, which could support a near-term rebound. Zacks bottom-fisher article Positive Sentiment: Arista remains exposed to the expanding AI-infrastructure market. Comparisons with Akamai focus on Arista’s stronger growth prospects and profitability, factors that could help justify a premium valuation if AI-related demand remains strong. AKAM versus ANET article Neutral Sentiment: After roughly a sevenfold five-year rally, investors are reassessing whether Arista’s cash generation can support its current valuation. The debate reflects elevated expectations rather than a reported deterioration in operations. Yahoo Finance valuation article Negative Sentiment: Reports that Arista shares fell following insider selling are weighing on sentiment, as investors may interpret sales as a cautionary signal even though insider transactions do not necessarily indicate weaker fundamentals. American Banking News insider-selling article Insiders Place Their Bets In other news, CEO Jayshree Ullal sold 767,029 shares of the stock in a transaction on Wednesday, August 5th. The stock was sold at an average price of $201.22, for a total transaction of $154,341,575.38. Following the completion of the transaction, the chief executive officer owned 16,387,981 shares in the company, valued at approximately $3,297,589,536.82. This represents a 4.47% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, major shareholder Andreas Bechtolsheim sold 300,000 shares of the stock in a transaction on Wednesday, August 5th. The stock was sold at an average price of $203.30, for a total value of $60,990,000.00. Following the transaction, the insider owned 181,143,048 shares of the company’s stock, valued at $36,826,381,658.40. The trade was a 0.17% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 3,627,449 shares of company stock worth $740,784,723 in the last ninety days. Insiders own 2.70% of the company’s stock. Wall Street Analysts Forecast Growth Several brokerages have recently weighed in on ANET. Rosenblatt Securities upped their price objective on shares of Arista Networks from $210.00 to $280.00 and gave the company a “buy” rating in a report on Wednesday, August 5th. Weiss Ratings downgraded Arista Networks from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Tuesday, October 6th. Bank of America restated a “buy” rating and issued a $240.00 target price (up from $200.00) on shares of Arista Networks in a research note on Wednesday, August 5th. BNP Paribas Exane raised Arista Networks to a “strong-buy” rating in a research report on Wednesday. Finally, Sanford C. Bernstein initiated coverage on Arista Networks in a research note on Wednesday, September 30th. They issued an “outperform” rating and a $250.00 price objective for the company. Two analysts have rated the stock with a Strong Buy rating, twenty have issued a Buy rating and two have given a Hold rating to the company’s stock. Based on data from MarketBeat, Arista Networks currently has an average rating of “Buy” and a consensus price target of $235.45.

View Our Latest Analysis on ANET

Arista Networks Price Performance Shares of Arista Networks stock opened at $176.84 on Friday. The firm has a market cap of $223.03 billion, a PE ratio of 58.73, a P/E/G ratio of 2.16 and a beta of 1.60. Arista Networks, Inc. has a 1 year low of $114.52 and a 1 year high of $217.41. The stock has a fifty day moving average price of $198.46 and a 200-day moving average price of $174.34.

Arista Networks (NYSE:ANET – Get Free Report) last posted its quarterly earnings data on Tuesday, August 4th. The technology company reported $1.02 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.89 by $0.13. Arista Networks had a net margin of 38.37% and a return on equity of 30.65%. The business had revenue of $3.04 billion during the quarter, compared to the consensus estimate of $2.83 billion. During the same quarter last year, the company posted $0.73 earnings per share. The firm’s quarterly revenue was up 37.7% compared to the same quarter last year. Arista Networks has set its Q3 2026 guidance at 1.060-1.080 EPS. As a group, equities analysts anticipate that Arista Networks, Inc. will post 3.79 EPS for the current fiscal year.

Arista Networks Profile (Free Report)

Arista Networks, Inc develops and sells cloud networking solutions for data centers, campus environments and high-performance computing applications. Its products include Ethernet switches, routers, wireless access points and related networking equipment designed to support cloud computing, artificial intelligence, enterprise and service-provider networks.

The company’s software portfolio includes Arista EOS, its network operating system, and CloudVision, a platform that helps customers manage, automate and monitor network infrastructure.

Read More Five stocks we like better than Arista Networks Bank of America Stock Sell-Off Looks Like a Buying Opportunity AST SpaceMobile Is Down 67%—Could SpaceX’s Mobile Push Deepen the Selloff? GlobalFoundries’ $21 Billion Deal Could Change the Economics of Chipmaking Fundamental and Technicals Signals Align for Costco: Is the Stock Finally Breaking Out? Want to see what other hedge funds are holding ANET? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Arista Networks, Inc. (NYSE:ANET – Free Report).

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When investors think about artificial intelligence (AI) infrastructure, Nvidia is often at the top of the list. Nvidia has become the world's largest company thanks to its vaunted graphics processing units (GPUs), which are considered indispensable for training and running AI models.

Another side of the coin is Cisco Systems, a blue chip tech company that makes switches, routers, and other equipment that moves information through data centers.

But there's another company that deserves attention: Arista Networks (ANET -5.04%). And while it may not attract the same attention as Nvidia, Arista is becoming a core AI infrastructure play by helping solve one of the biggest challenges facing data centers.

Image source: The Motley Fool.

What does Arista Networks do? AI data centers rely on thousands of graphics processing units (GPUs) working together to train and run complex artificial intelligence models. But all that computing power doesn't mean much if the processors can't communicate quickly enough. Massive amounts of data need to move between chips, servers, and storage systems, and slow connections can create bottlenecks that drag down the entire operation.

Arista's role is to make high-speed Ethernet switches that direct traffic through data centers, ensuring information gets where it needs to go without slowing everything down. Arista also develops networking software, including its Extensible Operating System (EOS), that helps operators manage those connections and keep their networks running efficiently.

As AI models become larger and more demanding, data centers need faster connections to keep those expensive GPUs working -- after all, having the most powerful processors is a waste of money if the underlying infrastructure doesn't allow them to work to capacity. And that's exactly the problem Arista is helping its customers solve.

In June, Arista introduced its 7060XE7 Series, a new generation of Ethernet networking equipment designed for AI infrastructure. The systems support connections running at 1.6 terabits per second, with up to approximately 100 terabits per second of total system bandwidth. Arista also says its support for linear pluggable optics can reduce interconnect power consumption by approximately 60% compared with traditional pluggable optics.

That's an important consideration for data center operators already dealing with enormous electricity demands. Faster networking is valuable, but reducing the power required to move information can also help control operating expenses.

ANET Arista Networks$185.58-$9.84 (-5.04%)

NYSE · As of 4:00 PM ET 10/15/26

Arista is expanding its role in AI infrastructure Arista isn't simply selling faster switches. The company is working to make Ethernet a larger part of how AI computing systems communicate.

On Oct. 7, Arista announced a new rack-scale networking architecture developed with technology partners including Advanced Micro Devices, Broadcom, Meta Platforms, Microsoft, and Qualcomm.

Its Etherlink SU-144 design supports connections among up to 144 AI accelerators within a single-hop network, with an architecture that scales across racks to support up to 1,024 accelerators.

The distinction matters because Arista is moving beyond connecting separate servers and data center racks. It's developing technology that allows large groups of AI processors to communicate more closely, using Ethernet as an alternative to proprietary networking systems.

That could give cloud providers greater flexibility when choosing computing equipment and building new AI systems.

Arista stock hasn't disappointed While Nvidia and Cisco may get more attention, Arista stock has outperformed both so far this year, rising 54% versus a 50% jump for Cisco and a 20% gain for Nvidia.

Revenue in the second quarter was $3.03 billion, up 37.7% from a year ago and 12.1% sequentially. Net income was $1.21 billion, up from $888 million a year ago, and diluted earnings per share was $0.95 versus $0.70 in Q2 2025.

ANET data by YCharts

"Customers see networking as the central nervous system for infrastructure from the client to campus to data and AI centers," CEO Jayshree Ullal said.

The company is planning to report its third-quarter earnings on Nov. 3, and has issued guidance for revenue of $3.3 billion and diluted net income between $1.06 and $1.08 per share.

Arista Networks is an AI stock worth owning Nvidia remains a major force in AI computing, and Cisco is a formidable networking competitor. Arista also faces competition from proprietary networking technologies and the risk that major cloud customers will develop their own equipment.

But Arista has a compelling role in the AI build-out. Its equipment addresses a problem that becomes more demanding as companies deploy additional processors -- moving enormous amounts of data quickly, reliably, and without wasting electricity.

Investors don't have to own the company that makes the GPUs to benefit from the expansion of AI infrastructure spending. Arista offers a viable way to participate through the networking equipment that helps put all that computing power to work.

Perpetual Ltd raised its holdings in shares of Arista Networks, Inc. (NYSE:ANET – Free Report) by 964.3% in the 3rd quarter, according to its most recent 13F filing with the SEC. The fund owned 153,149 shares of the technology company’s stock after acquiring an additional 138,759 shares during the period. Perpetual Ltd’s holdings in Arista Networks were worth $31,180,000 at the end of the most recent reporting period.

A number of other large investors also recently made changes to their positions in the stock. JGP Wealth Management LLC bought a new position in Arista Networks during the 3rd quarter worth approximately $255,000. RTD Financial Advisors Inc. bought a new position in shares of Arista Networks during the third quarter worth $358,000. Gallagher Capital Advisors LLC bought a new position in shares of Arista Networks during the third quarter worth $3,256,000. Armstrong Advisory Group Inc. grew its holdings in shares of Arista Networks by 23.8% in the 3rd quarter. Armstrong Advisory Group Inc. now owns 1,550 shares of the technology company’s stock valued at $316,000 after buying an additional 298 shares during the period. Finally, Marquette Asset Management LLC increased its position in shares of Arista Networks by 10,000.0% in the 3rd quarter. Marquette Asset Management LLC now owns 1,414 shares of the technology company’s stock valued at $288,000 after buying an additional 1,400 shares in the last quarter. Institutional investors and hedge funds own 82.47% of the company’s stock.

Insiders Place Their Bets
In other Arista Networks news, major shareholder Andreas Bechtolsheim sold 300,000 shares of the stock in a transaction dated Wednesday, August 5th. The stock was sold at an average price of $203.30, for a total transaction of $60,990,000.00. Following the completion of the transaction, the insider owned 181,143,048 shares in the company, valued at approximately $36,826,381,658.40. This represents a 0.17% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Jayshree Ullal sold 767,029 shares of Arista Networks stock in a transaction dated Wednesday, August 5th. The shares were sold at an average price of $201.22, for a total value of $154,341,575.38. Following the completion of the sale, the chief executive officer directly owned 16,387,981 shares in the company, valued at $3,297,589,536.82. This represents a 4.47% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders sold 3,468,906 shares of company stock valued at $706,366,437. Company insiders own 2.70% of the company’s stock.

Analyst Ratings Changes
ANET has been the topic of several research analyst reports. Piper Sandler reaffirmed an “overweight” rating and set a $240.00 price objective (up from $181.00) on shares of Arista Networks in a research note on Wednesday, August 5th. Rosenblatt Securities boosted their target price on Arista Networks from $210.00 to $280.00 and gave the company a “buy” rating in a research note on Wednesday, August 5th. Wells Fargo & Company reissued an “overweight” rating and issued a $255.00 target price (up from $200.00) on shares of Arista Networks in a research note on Wednesday, August 5th. Needham & Company LLC restated a “buy” rating and issued a $260.00 price target (up from $200.00) on shares of Arista Networks in a report on Wednesday, August 5th. Finally, Erste Group Bank raised Arista Networks from a “hold” rating to a “buy” rating in a research report on Wednesday, July 15th. One research analyst has rated the stock with a Strong Buy rating, twenty have given a Buy rating and two have given a Hold rating to the company’s stock. Based on data from MarketBeat, the company currently has an average rating of “Moderate Buy” and an average target price of $235.45.
Get Our Latest Report on ANET

Arista Networks Stock Down 2.8%
Arista Networks stock opened at $210.72 on Tuesday. The stock has a market capitalization of $265.76 billion, a PE ratio of 66.47, a price-to-earnings-growth ratio of 2.52 and a beta of 1.60. Arista Networks, Inc. has a twelve month low of $114.52 and a twelve month high of $217.41. The company has a 50 day moving average of $198.62 and a 200-day moving average of $172.87.

Arista Networks (NYSE:ANET – Get Free Report) last issued its quarterly earnings data on Tuesday, August 4th. The technology company reported $1.02 EPS for the quarter, topping analysts’ consensus estimates of $0.89 by $0.13. Arista Networks had a net margin of 38.37% and a return on equity of 30.65%. The business had revenue of $3.04 billion for the quarter, compared to analyst estimates of $2.83 billion. During the same period last year, the business posted $0.73 earnings per share. The firm’s quarterly revenue was up 37.7% on a year-over-year basis. Arista Networks has set its Q3 2026 guidance at 1.060-1.080 EPS. Equities analysts anticipate that Arista Networks, Inc. will post 3.78 EPS for the current fiscal year.

(Free Report)

Arista Networks, Inc develops and sells cloud networking solutions for data centers, campus environments and high-performance computing applications. Its products include Ethernet switches, routers, wireless access points and related networking equipment designed to support cloud computing, artificial intelligence, enterprise and service-provider networks.

The company’s software portfolio includes Arista EOS, its network operating system, and CloudVision, a platform that helps customers manage, automate and monitor network infrastructure.

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HWG Holdings LP purchased a new position in shares of Arista Networks, Inc. (NYSE:ANET – Free Report) during the third quarter, according to its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The firm purchased 18,117 shares of the technology company’s stock, valued at approximately $3,688,000. Arista Networks makes up about 0.9% of HWG Holdings LP’s investment portfolio, making the stock its 29th biggest holding.

Other institutional investors and hedge funds also recently made changes to their positions in the company. Applied Capital LLC FL bought a new position in Arista Networks during the third quarter worth about $6,005,000. Dominguez Wealth Management Solutions Inc. bought a new stake in shares of Arista Networks in the third quarter worth about $773,000. Elevation Wealth Partners LLC increased its holdings in shares of Arista Networks by 386.7% in the third quarter. Elevation Wealth Partners LLC now owns 1,431 shares of the technology company’s stock worth $291,000 after acquiring an additional 1,137 shares in the last quarter. Retirement Wealth Solutions LLC raised its position in shares of Arista Networks by 890.0% during the third quarter. Retirement Wealth Solutions LLC now owns 297 shares of the technology company’s stock worth $60,000 after purchasing an additional 267 shares during the period. Finally, Cooper Financial Group raised its position in shares of Arista Networks by 36.6% during the third quarter. Cooper Financial Group now owns 17,084 shares of the technology company’s stock worth $3,478,000 after purchasing an additional 4,576 shares during the period. Institutional investors and hedge funds own 82.47% of the company’s stock.

Arista Networks Stock Performance NYSE:ANET opened at $215.71 on Thursday. The stock has a 50-day simple moving average of $196.59 and a 200 day simple moving average of $171.18. Arista Networks, Inc. has a 52-week low of $114.52 and a 52-week high of $217.32. The company has a market cap of $272.06 billion, a PE ratio of 68.05, a PEG ratio of 2.53 and a beta of 1.60.

Arista Networks (NYSE:ANET – Get Free Report) last released its earnings results on Tuesday, August 4th. The technology company reported $1.02 EPS for the quarter, beating the consensus estimate of $0.89 by $0.13. Arista Networks had a return on equity of 30.65% and a net margin of 38.37%.The firm had revenue of $3.04 billion for the quarter, compared to analysts’ expectations of $2.83 billion. During the same quarter in the previous year, the business posted $0.73 EPS. The business’s quarterly revenue was up 37.7% compared to the same quarter last year. Arista Networks has set its Q3 2026 guidance at 1.060-1.080 EPS. On average, research analysts predict that Arista Networks, Inc. will post 3.74 earnings per share for the current fiscal year. Key Stories Impacting Arista Networks Here are the key news stories impacting Arista Networks this week:

Positive Sentiment: Arista announced an open Ethernet rack-scale portfolio designed for high-density, scale-up and scale-out AI infrastructure. The liquid-cooled solutions use open standards and were developed with partners including AMD, Arm, Broadcom, Meta, Microsoft and Qualcomm, strengthening Arista’s positioning in the fast-growing AI data-center networking market. Arista Announces Rack-Scale Architectures for Scale-Up and Scale-Out AI Fabrics Positive Sentiment: ClearBridge Investments highlighted Arista as an AI infrastructure company with solid execution, a clearer path to AI monetization and raised guidance. The commentary suggests investors are favoring Arista over some higher-momentum semiconductor names. Arista Networks Outperforms AI Infrastructure Peers Positive Sentiment: Earlier analyst actions remain supportive: Bernstein initiated coverage at Outperform, while the broader analyst consensus is Buy with a $231.70 target. Arista’s latest reported quarter also showed strong momentum, including 37.7% year-over-year revenue growth and earnings above expectations. Neutral Sentiment: Arista will report third-quarter 2026 results after the market close on November 3. Investors may be positioning ahead of the release, with attention focused on whether AI-related demand supports the company’s guidance of $1.06-$1.08 in quarterly EPS. Arista Networks Q3 2026 Earnings Date Negative Sentiment: Zacks Research downgraded Arista from Strong Buy to Hold, which may have contributed to profit-taking after the stock’s sharp rally and elevated valuation. Negative Sentiment: A director sold 5,000 shares through a pre-arranged Rule 10b5-1 plan. Although the transaction was scheduled in advance, it adds a modest negative signal for sentiment. Analysts Set New Price Targets Several equities analysts recently issued reports on the company. Erste Group Bank upgraded Arista Networks from a “hold” rating to a “buy” rating in a research report on Wednesday, July 15th. Sanford C. Bernstein assumed coverage on shares of Arista Networks in a research note on Wednesday, September 30th. They issued an “outperform” rating and a $250.00 price target on the stock. Deutsche Bank Aktiengesellschaft started coverage on shares of Arista Networks in a report on Monday, August 31st. They issued a “buy” rating and a $220.00 price target for the company. Jefferies Financial Group set a $250.00 price objective on shares of Arista Networks in a research report on Wednesday, August 5th. Finally, Rosenblatt Securities raised their price objective on shares of Arista Networks from $210.00 to $280.00 and gave the stock a “buy” rating in a report on Wednesday, August 5th. One equities research analyst has rated the stock with a Strong Buy rating, twenty have assigned a Buy rating and two have issued a Hold rating to the company’s stock. According to data from MarketBeat, Arista Networks has an average rating of “Moderate Buy” and an average target price of $231.70.

Get Our Latest Stock Analysis on ANET

Insiders Place Their Bets In related news, CEO Jayshree Ullal sold 62,622 shares of the firm’s stock in a transaction on Friday, September 25th. The shares were sold at an average price of $211.40, for a total value of $13,238,290.80. Following the completion of the transaction, the chief executive officer owned 4,876,972 shares of the company’s stock, valued at approximately $1,030,991,880.80. This trade represents a 1.27% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Kenneth Duda sold 17,333 shares of Arista Networks stock in a transaction on Monday, September 21st. The shares were sold at an average price of $203.50, for a total transaction of $3,527,265.50. Following the completion of the sale, the insider owned 12,976 shares in the company, valued at $2,640,616. The trade was a 57.19% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 3,144,894 shares of company stock valued at $631,310,023 over the last 90 days. 2.70% of the stock is currently owned by company insiders.

Arista Networks Company Profile (Free Report)

Arista Networks, Inc develops and sells cloud networking solutions for data centers, campus environments and high-performance computing applications. Its products include Ethernet switches, routers, wireless access points and related networking equipment designed to support cloud computing, artificial intelligence, enterprise and service-provider networks.

The company’s software portfolio includes Arista EOS, its network operating system, and CloudVision, a platform that helps customers manage, automate and monitor network infrastructure.

Further Reading Five stocks we like better than Arista Networks Skydance Just Became a Media Giant—With an $80 Billion Debt Load Could Velo3D Be the Next Defense Buyout Target? Penguin Solutions Is Soaring as AI Memory Demand Explodes Alphabet’s Chart Is Coiling—and the Fundamentals May Be Ready to Back It Up Want to see what other hedge funds are holding ANET? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Arista Networks, Inc. (NYSE:ANET – Free Report).

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Alkeme Wealth LLC purchased a new stake in shares of Arista Networks, Inc. (NYSE:ANET – Free Report) in the 3rd quarter, according to the company in its most recent Form 13F filing with the Securities and Exchange Commission (SEC). The fund purchased 66,887 shares of the technology company’s stock, valued at approximately $13,618,000. Arista Networks accounts for approximately 4.6% of Alkeme Wealth LLC’s portfolio, making the stock its 3rd biggest holding.

Other large investors have also recently added to or reduced their stakes in the company. Cura Wealth Advisors LLC raised its holdings in shares of Arista Networks by 3.1% during the second quarter. Cura Wealth Advisors LLC now owns 1,748 shares of the technology company’s stock valued at $297,000 after acquiring an additional 52 shares during the period. Madison Wealth Partners Inc raised its holdings in Arista Networks by 2.8% in the 2nd quarter. Madison Wealth Partners Inc now owns 2,179 shares of the technology company’s stock worth $370,000 after acquiring an additional 60 shares during the period. Intrua Financial LLC lifted its position in shares of Arista Networks by 2.7% during the 1st quarter. Intrua Financial LLC now owns 2,307 shares of the technology company’s stock worth $283,000 after purchasing an additional 61 shares during the last quarter. Shepherd Financial Partners LLC boosted its stake in Arista Networks by 1.2% during the 2nd quarter. Shepherd Financial Partners LLC now owns 5,403 shares of the technology company’s stock valued at $918,000 after purchasing an additional 66 shares during the period. Finally, NBT Bank N A NY increased its position in Arista Networks by 37.2% during the first quarter. NBT Bank N A NY now owns 247 shares of the technology company’s stock worth $30,000 after acquiring an additional 67 shares during the period. 82.47% of the stock is currently owned by institutional investors and hedge funds.

Arista Networks Stock Performance Shares of NYSE:ANET opened at $215.71 on Thursday. The business has a fifty day moving average of $196.59 and a 200-day moving average of $171.18. Arista Networks, Inc. has a twelve month low of $114.52 and a twelve month high of $217.32. The firm has a market cap of $272.06 billion, a PE ratio of 68.05, a price-to-earnings-growth ratio of 2.53 and a beta of 1.60.

Arista Networks (NYSE:ANET – Get Free Report) last announced its earnings results on Tuesday, August 4th. The technology company reported $1.02 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $0.89 by $0.13. The company had revenue of $3.04 billion for the quarter, compared to analyst estimates of $2.83 billion. Arista Networks had a net margin of 38.37% and a return on equity of 30.65%. Arista Networks’s quarterly revenue was up 37.7% on a year-over-year basis. During the same period in the prior year, the business earned $0.73 earnings per share. Arista Networks has set its Q3 2026 guidance at 1.060-1.080 EPS. On average, analysts anticipate that Arista Networks, Inc. will post 3.74 EPS for the current fiscal year. Insider Buying and Selling In related news, insider Kenneth Duda sold 17,333 shares of the firm’s stock in a transaction dated Monday, September 21st. The stock was sold at an average price of $203.50, for a total value of $3,527,265.50. Following the transaction, the insider owned 12,976 shares in the company, valued at $2,640,616. This trade represents a 57.19% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, major shareholder Andreas Bechtolsheim sold 300,000 shares of Arista Networks stock in a transaction dated Thursday, September 17th. The stock was sold at an average price of $198.95, for a total value of $59,685,000.00. Following the completion of the sale, the insider owned 180,543,048 shares of the company’s stock, valued at approximately $35,919,039,399.60. The trade was a 0.17% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders sold 3,144,894 shares of company stock worth $631,310,023. 2.70% of the stock is currently owned by company insiders.

Arista Networks News Roundup Here are the key news stories impacting Arista Networks this week:

Positive Sentiment: Arista announced an open Ethernet rack-scale portfolio designed for high-density, scale-up and scale-out AI infrastructure. The liquid-cooled solutions use open standards and were developed with partners including AMD, Arm, Broadcom, Meta, Microsoft and Qualcomm, strengthening Arista’s positioning in the fast-growing AI data-center networking market. Arista Announces Rack-Scale Architectures for Scale-Up and Scale-Out AI Fabrics Positive Sentiment: ClearBridge Investments highlighted Arista as an AI infrastructure company with solid execution, a clearer path to AI monetization and raised guidance. The commentary suggests investors are favoring Arista over some higher-momentum semiconductor names. Arista Networks Outperforms AI Infrastructure Peers Positive Sentiment: Earlier analyst actions remain supportive: Bernstein initiated coverage at Outperform, while the broader analyst consensus is Buy with a $231.70 target. Arista’s latest reported quarter also showed strong momentum, including 37.7% year-over-year revenue growth and earnings above expectations. Neutral Sentiment: Arista will report third-quarter 2026 results after the market close on November 3. Investors may be positioning ahead of the release, with attention focused on whether AI-related demand supports the company’s guidance of $1.06-$1.08 in quarterly EPS. Arista Networks Q3 2026 Earnings Date Negative Sentiment: Zacks Research downgraded Arista from Strong Buy to Hold, which may have contributed to profit-taking after the stock’s sharp rally and elevated valuation. Negative Sentiment: A director sold 5,000 shares through a pre-arranged Rule 10b5-1 plan. Although the transaction was scheduled in advance, it adds a modest negative signal for sentiment. Wall Street Analysts Forecast Growth A number of research firms recently weighed in on ANET. Deutsche Bank Aktiengesellschaft initiated coverage on Arista Networks in a research report on Monday, August 31st. They set a “buy” rating and a $220.00 target price on the stock. UBS Group restated a “buy” rating and set a $259.00 price target (up from $187.00) on shares of Arista Networks in a research note on Wednesday, August 5th. Wells Fargo & Company reiterated an “overweight” rating and issued a $255.00 price objective (up from $200.00) on shares of Arista Networks in a research note on Wednesday, August 5th. TD Cowen upped their price target on Arista Networks from $210.00 to $250.00 and gave the company a “buy” rating in a research report on Wednesday, August 5th. Finally, The Goldman Sachs Group reiterated a “buy” rating and set a $225.00 price objective on shares of Arista Networks in a research note on Wednesday, August 5th. One equities research analyst has rated the stock with a Strong Buy rating, twenty have given a Buy rating and two have assigned a Hold rating to the stock. According to MarketBeat, Arista Networks currently has an average rating of “Moderate Buy” and a consensus price target of $231.70.

Read Our Latest Research Report on ANET

Arista Networks Company Profile (Free Report)

Arista Networks, Inc develops and sells cloud networking solutions for data centers, campus environments and high-performance computing applications. Its products include Ethernet switches, routers, wireless access points and related networking equipment designed to support cloud computing, artificial intelligence, enterprise and service-provider networks.

The company’s software portfolio includes Arista EOS, its network operating system, and CloudVision, a platform that helps customers manage, automate and monitor network infrastructure.

Featured Stories Five stocks we like better than Arista Networks Skydance Just Became a Media Giant—With an $80 Billion Debt Load Could Velo3D Be the Next Defense Buyout Target? Penguin Solutions Is Soaring as AI Memory Demand Explodes Alphabet’s Chart Is Coiling—and the Fundamentals May Be Ready to Back It Up Want to see what other hedge funds are holding ANET? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Arista Networks, Inc. (NYSE:ANET – Free Report).

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Nvidia (NVDA +2.12%) and Advanced Micro Devices (AMD -0.34%) have been some of the top-performing artificial intelligence (AI) stocks due to their chips, but the next winner may be in networking. Data centers require a significant amount of networking cables, and that can position Arista Networks (ANET -0.22%) to outperform both chipmakers during the next year. Here's what makes the stock worth watching.

Image source: Getty Images.

The business model Arista Networks specializes in Ethernet switches, which transport data in, out, and between server racks. Those racks contain the AI chips that process intense workloads and enable AI products and services like ChatGPT. All of Arista's switches run on its proprietary software.

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The neat thing about the software is that it lets Arista's Ethernet switches easily talk to each other and move data more seamlessly across racks and the data center as a whole. Engineers can make changes to thousands of Arista switches simultaneously instead of making changes to individual switches, which was a nightmare in the early 2000s.

Arista sells more switches when customers need to upgrade their data centers to handle more intense workloads. Old ones need to be replaced. Sales also go up when tech giants need to expand their data centers. More chips require more racks, and more racks translate into additional Ethernet switch sales.

It's a huge pain for any data center to switch from Arista to any competitor. That would mean getting rid of all Arista switches and the critical software that links them all together.

Arista's customers have deep pockets Arista leans heavily on a small number of customers, with Microsoft (MSFT +1.48%) accounting for more than one-quarter of the company's 2025 revenue. Although that type of concentration concerns some investors, Arista's high retention rate and good relationship with hyperscalers are important to keep in mind.

With that issue addressed, it's good to look closer at the customer profile. Microsoft is one of the cloud providers that works with Arista Networks. Amazon (AMZN -0.05%), Alphabet (GOOG +1.02%) (GOOGL +0.86%), and Meta Platforms (META +1.90%) are also customers, and all four of these companies pull in billions of dollars in quarterly profit.

Furthermore, all of these customers have committed to spending more money on artificial intelligence. As their efforts scale, they will need to bolster their AI infrastructure, and that includes buying more of Arista's products.

Those hyperscalers also posted double-digit percentage year-over-year revenue growth rates in their most recent quarters. If growth remains strong, these companies will have no problem pouring more money into Arista's coffers. The broader expansion of AI data centers can also result in new customers that improve diversification.

Revenue growth is trending higher The AI tailwind has benefited many companies, including Arista, and it's visible in financial results. Arista delivered 38% year-over-year revenue growth in the second quarter. It has an annualized revenue growth rate of 27% during the past decade, so the current growth rate is a big deal.

Arista's $3 billion in revenue also marked a 12% sequential boost. Arista Chief Executive Officer Jayshree Ullal touted the results while explaining that customers see Arista as the "central nervous system" for AI infrastructure.

It's not just this quarter, either. Arista has $5.1 billion in short-term deferred revenue, which will become realized revenue by the end of the year. It also has $1.8 billion in long-term deferred revenue.

Its revenue growth is also coming from all key regions. North American revenue increased by 36% year over year, with strong gains also posted in the EMEA and APAC regions. U.S. hyperscalers are driving most of the AI expenditures, but more traction in other parts of the world can help Arista sustain elevated revenue growth rates even if the North American market slows.

However, that slowdown scenario is unlikely anytime soon. Grand View Research projects a 31% compound annual growth rate (CAGR) for the AI industry through 2033, and Arista should be able to ride that momentum to new all-time highs.

Marc Guberti has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Arista Networks, Meta Platforms, Microsoft, and Nvidia. The Motley Fool has a disclosure policy.

Arista Networks, Inc. (ANET) rises 4,001% since 2015’s first institutional outlier inflow.

ANET’s programmable cloud networking hardware and low-latency switch solutions are critical parts hyperscaler infrastructure, enabling AI workloads as well as and other networks. The company’s second-quarter fiscal 2026 report showed $3 billion in quarterly revenue (up 37.7% year-over-year), diluted per-share earnings of $1.02 (a 39.7% gain), and raised 2026 revenue guidance to $12.6 billion (representing 40% annual growth), with at least $3.5 billion coming from AI (more than double the prior year). The company reports again on Nov. 2.

No wonder ANET shares are up 56% so far this year – and they could rise more. MoneyFlows data shows how Big Money investors are again betting heavily on the stock.

Institutions Buy Up Arista Networks Institutional volumes reveal plenty. In the last year, ANET has enjoyed strong investor demand, which we believe to be institutional support.

Each green bar signals unusually large volumes in ANET shares. They reflect our proprietary inflow signal, pushing the stock higher:

After ending 2025 with a series of outflows, ANET shares have again attracted institutions, gaining 56% YTD. Source: www.moneyflows.com Plenty of technology names are under accumulation right now. But there’s a powerful fundamental story happening with Arista Networks.

Arista Networks Fundamental Analysis Institutional support and a healthy fundamental backdrop make this company worth investigating. As you can see, ANET has had strong sales and earnings growth:

3-year sales growth rate (+27.3%) 3-year EPS growth rate (+36.8%) Source: FactSet

Also, EPS is estimated to ramp higher this year by +27.6%.

Now it makes sense why the stock has been generating Big Money interest. ANET has a track record of strong financial performance.

Marrying great fundamentals with MoneyFlows software has found some big winning stocks over the long term.

Arista Networks has been a top-rated stock at MoneyFlows for years. That means the stock has unusual buy pressure and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

It’s had 93 Big Money outlier inflow signals since 2015 and is up 4,001% since then. The blue bar below shows when ANET was a top pick in the last year…this remains a Big Money outlier:

ANET shares have generated 93 total outlier inflow signals, with six in the last year, rising 4,001% since the first one in 2015. Source: www.moneyflows.com Tracking unusual volumes reveals the power of money flows.

This is a trait that most outlier stocks exhibit…the best of the best. Big Money demand drives stocks upward.

Arista Networks Price Prediction The ANET action isn’t new at all. Big Money buying in the shares is signaling to take notice. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.

Disclosure: the author holds no position in ANET at the time of publication.

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AI training clusters stall the moment data cannot move fast enough between chips, which means the real bottleneck is not silicon but the fiber, switches, and optics surrounding it. Three under-the-radar infrastructure stocks sit at that choke point, and their…

Every GPU headline glosses over the same physics problem: A training cluster is only as fast as its slowest link. When tens of thousands of accelerators have to swap gradients in near lockstep, and when a single job now spans multiple data centers hundreds of miles apart, the choke point stops being FLOPS and starts being fiber, switches and coherent optics.

If data cannot arrive on time, expensive silicon sits idle. That is why hyperscalers are pouring capex into the network fabric, and why Cisco booked $9.3 billion of AI infrastructure orders in fiscal 2026 while calling the moment a “networking supercycle.” Three U.S.-listed names sit at the center of this layer, and their AI exposure is nowhere near the same.

Arista Networks: The Pure-Play Ethernet Bet on AI Back-End Fabrics Arista Networks (NYSE:ANET | ANET Price Prediction) designs the high-speed Ethernet switches, plus the EOS software that runs them, that hyperscalers use to wire GPU servers together inside AI data centers. Think of it as the plumbing that lets thousands of accelerators behave like one machine. Arista is the leading Ethernet-based challenger to NVIDIA’s proprietary InfiniBand stack for AI back-end networks, and it is the most direct beneficiary in this trio when a hyperscaler builds a new training cluster.

The numbers are the tell. In Q2 FY2026, Arista posted revenue of $3.04 billion, up 37.7% year over year (YoY), its first ever $3 billion quarter, with non-GAAP EPS of $1.02 beating consensus of $0.89. Management raised the 2026 revenue outlook to roughly $12.6 billion, a level it described as 40% annual growth, and said its AI Fabrics segment is on track for at least $3.5 billion in 2026. Market cap sits near $251.6 billion, with shares up 53.59% year to date (YTD) through Sept. 22.

The bull case: Arista is the merchant Ethernet vendor of choice as AI clusters get bigger and more distributed, and it is now selling into a third category, what it calls “scale-across” switching and routing, a market management sized at roughly $15 to $20 billion by 2030. Margins are expanding rather than compressing under the AI mix.

The risk: Concentration. CEO Jayshree Ullal said she “fully expects there to be one, maybe two, 10% customers” in the year ahead, and Microsoft and Meta remain the anchor buyers. Add sole-source component exposure and a trailing P/E of roughly 72, and there is no margin for a hyperscaler air pocket.

Cisco Systems: The Diversified Incumbent Where AI Is a Powerful Add-On Cisco Systems (NASDAQ:CSCO) is the diversified incumbent. It sells routers, switches, security, observability, campus Wi-Fi, and, increasingly, its own Silicon One chips and Acacia coherent optics into hyperscaler AI builds. That breadth matters for the framing here: Cisco’s AI exposure is real, but it is diluted by a much larger legacy base, and investors should size the AI upside accordingly.

In Q4 FY2026, Cisco reported revenue of $17.252 billion, up 17.58% year over year, with non-GAAP EPS of $1.22 beating the $1.1688 estimate. Networking revenue was $9.791 billion, up 28% YoY, and networking product orders were up 40% YoY, the eighth consecutive quarter of double-digit growth. Crucially, AI infrastructure revenue was about 6% of total Cisco revenue in FY2026, up from less than 2% in FY2025, with management guiding it to $7.5 billion in FY2027. Market cap is roughly $431.8 billion and the stock is up nearly 40% YTD through Sept. 22.

The bull case: Scale plus the enterprise campus refresh Cisco owns. Chair and CEO Chuck Robbins said “we believe the accelerating adoption of agentic AI is fueling a networking super cycle” and that Cisco is “only at the beginning” of it. Optics and Silicon One design wins are stacking up, with Acacia orders exceeding $1 billion in Q4.

The risk: It’s mix. Non-GAAP gross margin fell to 66.3% from 68.4% year over year as lower-margin AI hardware ramps, and price-increase pass-throughs can only offset so much. If hyperscaler AI CapEx cools before the enterprise refresh matures, Cisco’s AI thesis loses its acceleration.

Ciena: The Pure-Play Optical Bet on Connecting Data Centers to Each Other Ciena (NYSE:CIEN) is the specialist. It builds the coherent optical gear — WaveLogic chipsets, Waveserver platforms, RLS line systems and pluggable optics — that carry massive volumes of data across fiber between and inside AI data centers. As training clusters get too large for a single building and get split across sites tied together by dark fiber, Ciena’s data center interconnect (DCI) and “scale-across” products become the bridge that keeps distributed GPUs behaving like one supercomputer.

Fiscal Q3 2026 revenue hit $1.671 billion, up 37.05% year over year, with adjusted EPS of $2.11 versus a $1.7226 estimate. Cloud provider revenue was 53% of total, up 82% year over year, and Q3 backlog rose $800 million to $8.5 billion, with management targeting more than $10 billion by year end. Ciena also flagged a preliminary FY2027 outlook of at least 30% revenue growth and adjusted operating margin of 25% to 27%. Market cap is roughly $49.5 billion, and shares are up nearly 50% YTD through Sept. 22, even after a minor 0.91% pullback over the past month.

The bull case comes straight from management. CEO Gary Smith called this “the very early stages of a multi-year, highly durable network investment era” and described Ciena as “the only pure-play optical systems and interconnects provider”. Ciena expects its total addressable market to grow from roughly $25 billion today to about $50 billion by 2029, driven by DCI, submarine, and distributed AI training links.

The risk is customer concentration and cyclicality. Two customers were 41.7% of Q3 revenue, and optical component and substrate supply constraints continue to gate revenue. Any pause in cloud AI capex would show up in this backlog first.

How to Think About the Three Together These are three different bets on the same physics problem. Arista is the highest-purity AI switching name with the tightest hyperscaler linkage. Cisco offers the most diversified, lowest-volatility way to own the buildout, at the cost of a diluted AI signal. Ciena is the optical transport specialist whose growth curve is levered directly to distributed training clusters that cannot be contained in a single building. All three sit outside the chipmaker spotlight, which is exactly the angle we took in a free report on seven AI infrastructure suppliers behind the buildout. What differs across these three is which link in the chain fails first if the AI order book ever pauses.

Contact [email protected] for any questions or corrections.

Key Takeaways Vertiv's sales rose 24% as AI drives demand for power, cooling and dense data-center infrastructure.Arista's revenues grew 37.7%, fueled by demand for networking across expanding AI clusters.Vertiv plans a $1.45 billion UtilityInnovation Group deal to expand its power infrastructure portfolio. The AI boom is creating a second layer of investment opportunities beyond the chips that power it. As hyperscalers accelerate spending on AI servers and data centers, demand is rising for the power, cooling and networking infrastructure required to support increasingly dense computing environments. This shift is becoming more important as AI workloads consume more electricity and require faster movement of data across large clusters.

According to the U.S. Energy Information Administration's Sept. 9 report,  U.S. electricity generation is expected to increase 2.2% in 2026 to 4,368 billion kilowatt-hours, with data-center development among the factors supporting demand.

This makes the broader AI data-center ecosystem worth watching even as investors debate the sustainability of massive AI spending. NVIDIA (NVDA - Free Report) remains the central beneficiary of AI compute demand, but companies supplying the infrastructure around those GPUs can also benefit as data-center capacity expands.

For investors looking beyond the semiconductor leader, power, cooling and networking providers offer direct exposure to this next phase of the AI buildout. Here, we discuss two stocks, Vertiv (VRT - Free Report) and Arista Networks (ANET - Free Report) , which offer exposure to the AI data-center boom beyond NVIDIA, with opportunities spanning power and cooling, networking and AI infrastructure.

One-Month Stock Comparison
Image Source: Zacks Investment Research

Why Look Beyond NVIDIA?NVIDIA remains the dominant supplier of AI accelerators, with fiscal 2027, second-quarter Data Center revenues soaring 117% year over year driven by strong demand for its Blackwell platform and the ramp of Blackwell Ultra. However, AI data centers require much more than GPUs. They also need high-speed networking, servers, power-management systems, cooling equipment and other critical infrastructure.

Recent corporate results provide further evidence that AI infrastructure spending is extending beyond GPUs. Broadcom's (AVGO - Free Report) fiscal third-quarter AI semiconductor revenues jumped 221% year over year, reflecting strong demand for custom AI accelerators and networking. Hewlett Packard (HPE - Free Report) 's fiscal third-quarter Data Center Networking revenues surged 112.2% to $382 million, while the company's AI Systems orders reached $2.4 billion.

These trends suggest that the AI investment opportunity is broadening across the data-center stack, creating opportunities in networking, computing, power and cooling alongside the accelerator market.

2 Stocks to Buy Beyond NVIDIAVertiv: It provides power, cooling and other critical infrastructure for data centers, making it a direct beneficiary of rising AI rack density and electricity requirements. Second-quarter 2026 sales increased 24% year over year, while product revenues rose 22%. The company expects third-quarter sales of $3.65-$3.85 billion.

Vertiv is also expanding its exposure to power-constrained data centers. On Sept. 2, the company announced an agreement to acquire UtilityInnovation Group for approximately $1.45 billion in cash at closing, with up to $1.15 billion in additional consideration tied to EBITDA targets. The deal would add microgrid controls, onsite-generation orchestration and behind-the-meter power architecture to Vertiv's portfolio. Vertiv expects the transaction to close in the fourth quarter of 2026.

VRT currently carries a Zacks Rank #2 (Buy). Over the past three months, VRT shares have declined about 30.4%, despite the company's strong AI infrastructure demand and raised guidance. The pullback could provide a more attractive entry point for investors seeking long-term exposure to the AI data-center buildout. Meanwhile, the stock is projected to report 59.3% earnings growth on 36.9% revenue growth in 2026.

Image Source: Zacks Investment Research

Arista: It supplies high-speed networking equipment that enables massive AI clusters to move data efficiently. Its second-quarter revenues increased 37.7% year over year, marking its first quarter above $3 billion. Management expects third-quarter revenues of approximately $3.3 billion.

Arista is also benefiting from rising demand for AI networking as cloud and hyperscale customers expand their data-center infrastructure. The company has been developing Ethernet-based solutions for large AI clusters, including its Etherlink AI networking portfolio. Recent industry commentary points to growing demand for high-speed networking as AI clusters become larger and more interconnected.

Shares of ANET have gained 14.2% over the past three months. However, the company’s robust AI networking demand and continued product innovation indicate further growth potential as data-center customers expand their AI infrastructure. This Zacks Rank #1 (Strong Buy) stock is projected to report 35.6% earnings growth on 39.1% revenue growth in 2026. You can see the complete list of today’s Zacks #1 Rank stocks here.

Image Source: Zacks Investment Research

Power, cooling and customer acceptance can delay recognition long after networking equipment ships. Summary

Arista’s demand visibility expanded dramatically, but deploying that demand may require years and additional working capital.

Arista Networks ANET, the cloud and AI networking specialist, revealed that its multiyear purchase commitments had nearly tripled to $9.7 billion during Tuesday's Goldman Sachs conference. Shares were nearly flat Wednesday at $195.03, giving the company a market value of approximately $248 billion.

The demand is already reaching the income statement. Arista's second-quarter results delivered its first $3 billion quarter, with revenue surging 37.7% to $3.04 billion and adjusted operating margin hitting 49.9%. Management expects roughly $3.3 billion of third-quarter revenue, while new 1.6-terabit platforms position Arista to move even more data across sprawling AI clusters.

The $9.7 billion commitment figure equals about 3.2 quarters of current revenue, but investors should not mistake it for booked sales. Deployments can take 18 to 24 months while customers secure power, cooling, cabling and final approval, leaving Arista exposed to timing delays after it commits cash to inventory and suppliers. The picture reinforces that valuation risk: at $195.03, the stock trades 19.36% above its $163.39 GF Value™, suggesting that plenty of AI-networking optimism is already priced in.

Disclosures I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours.

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3 AI Infrastructure Stocks to Watch Beyond NVIDIAArista Networks NYSE: ANET executives said the company is investing across its networking portfolio rather than making tradeoffs between AI and data-center switching, software, campus networking and routing, as it works toward its 2026 revenue outlook of $12.6 billion.

Speaking at the Goldman Sachs Communacopia and Technology Conference, Chief Financial Officer Chantelle Breithaupt said the outlook implies roughly 40% growth and provides substantial absolute-dollar capacity for research and development. Arista generally targets R&D spending of 8% to 10% of revenue, she said.

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Beyond the Foundry: 5 Infrastructure Stocks Tackling the AI BottlenecksPresident and Chief Technology Officer Ken Duda said the company’s work with sophisticated hyperscale customers on new technologies and customized systems supports its broader portfolio. Investments in hardware and software for large operators can flow into specialty cloud providers and enterprise deployments, he said.

Supply Chain, Demand Visibility and Margins Breithaupt said Arista raised its annual guidance by more than $1 billion after becoming more comfortable with supply availability and gaining greater order visibility. The company secured purchase commitments, received support from suppliers and had visibility into two quarters of purchase orders by the August timeframe, she said.

5 AI Infrastructure Stocks Smart Money Is Buying Before the Next SurgeWhile supply conditions have improved, Breithaupt cautioned that the industry is not fully beyond component constraints. Availability can be affected by a range of items, from major components such as chips and memory to peripheral items including printed circuit boards and power cables.

Arista’s multiyear purchase commitments nearly tripled to $9.7 billion, according to the discussion. Breithaupt characterized the increase as a demand signal rather than solely the result of component-price inflation. Chips have lead times of roughly 52 weeks, she said, prompting the company to make purchasing decisions well ahead of the order visibility it has in hand.

The company is comfortable with that approach because its portfolio is relatively flexible and components can be used across products and customers, Breithaupt said. Duda added that common switch models and components serve multiple customer types and use cases, helping reduce potential inventory-obsolescence risk.

Arista maintained its 2026 gross-margin outlook of 62% to 64%. Breithaupt said customer mix remains a primary variable, while tariff refunds are expected to contribute about 30 basis points for the year. The company also implemented a targeted price increase for products with meaningful exposure to memory and other component-cost inflation. The increase was intended to offset inflation rather than expand margins, she said.

EOS and Open Networking Duda said Arista continues to view its Extensible Operating System, or EOS, as a major differentiator. He said open-source network operating systems require extensive technical effort to assemble, validate and deploy across specific hardware platforms and customer use cases.

In hyperscale environments, open-source approaches are primarily used to support multisourcing and reduce dependence on a single software supplier, Duda said. He said Arista retains an advantage in demanding routing applications that require fast convergence, large routing tables, policy controls, tunnel encapsulation capabilities and operation within hardware-memory limits.

For cloud providers and enterprises, Duda said EOS, along with Arista’s CloudVision management platform, offers consistent operations across data centers, campuses, wide-area networks and cloud deployments. The same operating-system code runs across those environments, he said.

AI Networking Opportunities Executives highlighted AI infrastructure as a significant growth driver, particularly among NeoCloud providers. Duda said these customers seek best-of-breed technologies to optimize their full technology stacks and reduce token costs, rather than relying on a single-vendor system.

Arista’s offerings include networking capabilities for scale-out AI clusters, as well as CloudVision visibility into both network conditions and AI-server metrics such as flow control, congestion and retransmissions, Duda said. Breithaupt said the company remains selective in its commercial arrangements with NeoCloud customers, using measures such as prepayment where appropriate because not all emerging providers have equivalent financial backing.

Duda defined scale-across networking as the interconnection of AI clusters split across data centers. Unlike scale-out networking within a data center, scale-across applications require greater routing complexity and deeper buffering to account for the longer round-trip distance between geographically distributed clusters, he said.

Power, cooling and data-center-space constraints are driving customers to distribute GPU deployments across locations, creating demand for scale-across architectures and Arista’s 7800R Series platforms, according to Duda. Breithaupt said scale-across represented about 30% of Arista’s stated $3.5 billion AI revenue target for the year.

The company also sees a longer-term opportunity in scale-up networking, which connects accelerators within a rack or enclosure. Duda said Arista has limited share in that market today but expects Ethernet-based standardization, including ESUN, to create an opening. He expects activity to begin ramping in the latter part of 2027, with volume potentially arriving in early 2028.

Campus Growth and Capital Priorities Arista raised its campus revenue target to more than $1.25 billion for the year. Duda said the company initially won campus business from existing data-center customers, but is now seeing a growing share of new campus customers seeking alternatives to incumbent vendors.

The company cited its Cognitive Campus strategy, which includes always-on operations, zero-touch capabilities and zero-trust networking. Duda said Arista’s in-service software upgrades have become a differentiator for campuses supporting 24-hour operations such as hospitals, manufacturing facilities, logistics centers and media operations.

Breithaupt said Arista has roughly 5% market share in campus networking and views the segment as a high-volume, lower-dollar growth opportunity over multiple years.

On capital allocation, Breithaupt said working capital is the company’s first priority as it navigates what she described as step-function growth. Share repurchases remain opportunistic, while Arista continues to evaluate acquisition opportunities but has not identified a target that meets both its technology and cultural criteria.

Looking ahead, Duda said he is particularly interested in applying AI internally and within Arista’s products to build network engineering and operations assistants. Such tools could improve customer efficiency, uptime and operational management, he said.

About Arista Networks (NYSE:ANET)Arista Networks, Inc designs, develops and sells cloud networking solutions for large data centers, cloud service providers, internet companies, enterprises and other organizations. Its portfolio includes high-performance Ethernet switches, routers and wireless networking products used to connect servers, storage systems, users and applications across data center and campus environments.

The company's software offerings include Arista EOS, its Linux-based network operating system, and CloudVision, a cloud-based platform for network management, automation, monitoring and analytics.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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Barbara Oil Co. bought a new position in Arista Networks, Inc. (NYSE:ANET – Free Report) during the 2nd quarter, according to its most recent disclosure with the Securities and Exchange Commission (SEC). The fund bought 7,370 shares of the technology company’s stock, valued at approximately $1,246,000.

A number of other hedge funds also recently bought and sold shares of the business. Brighton Jones LLC increased its position in Arista Networks by 321.7% during the 4th quarter. Brighton Jones LLC now owns 7,806 shares of the technology company’s stock valued at $863,000 after purchasing an additional 5,955 shares during the period. Revolve Wealth Partners LLC purchased a new position in Arista Networks during the fourth quarter valued at $202,000. Bison Wealth LLC bought a new position in Arista Networks in the 4th quarter worth about $251,000. Sivia Capital Partners LLC increased its stake in Arista Networks by 48.4% during the 2nd quarter. Sivia Capital Partners LLC now owns 10,723 shares of the technology company’s stock valued at $1,097,000 after purchasing an additional 3,496 shares in the last quarter. Finally, Gamco Investors INC. ET AL increased its stake in Arista Networks by 31.3% during the 2nd quarter. Gamco Investors INC. ET AL now owns 4,193 shares of the technology company’s stock valued at $429,000 after purchasing an additional 1,000 shares in the last quarter. Hedge funds and other institutional investors own 82.47% of the company’s stock.

Key Headlines Impacting Arista Networks Here are the key news stories impacting Arista Networks this week:

Positive Sentiment: Arista’s leadership in high-speed networking for cloud and AI infrastructure is highlighted as a key advantage over Salesforce, reinforcing the company’s long-term growth profile. Arista Networks vs. Salesforce: Which Technology Stock Is a Better Buy in 2026? Positive Sentiment: ANET was included among high-return-on-equity, cash-rich stocks that may appeal to investors seeking quality during volatile markets. Arista’s reported return on equity was approximately 31%. 5 High ROE Stocks to Buy as Markets Sway on Intense Volatility Positive Sentiment: Arista has nearly tripled multiyear purchase commitments to roughly $9.7 billion, suggesting management is securing components in anticipation of sustained AI and cloud demand. The spending also signals confidence in a sizable future order pipeline, though it raises execution and inventory risks. Can ANET Stock Compound Its Way Higher? Positive Sentiment: Arista’s second-quarter performance was presented as strong enough to support a higher price target. The company recently beat consensus earnings and revenue estimates and issued third-quarter EPS guidance of $1.06 to $1.08. Arista Networks: Q2 2026 Justifies A Higher Price Target Neutral Sentiment: Compared with CoreWeave, Arista generates substantially more revenue and has delivered steadier quarter-over-quarter growth, while CoreWeave is expanding faster. The comparison supports Arista’s scale but highlights increasing competition in AI infrastructure. Arista Networks vs. CoreWeave: What Revenue Trends Tell Investors About These Artificial Intelligence Companies Negative Sentiment: At an elevated valuation, investors are paying for continued rapid growth. Arista’s future margins could depend heavily on the mix and profitability of customers behind its large capacity commitments. What You Are Really Paying For In Arista Networks Stock Wall Street Analysts Forecast Growth Several brokerages have recently issued reports on ANET. The Goldman Sachs Group reiterated a “buy” rating and issued a $225.00 target price on shares of Arista Networks in a research note on Wednesday, August 5th. KeyCorp reissued an “overweight” rating and set a $250.00 price target (up from $200.00) on shares of Arista Networks in a research report on Wednesday, August 5th. Erste Group Bank upgraded shares of Arista Networks from a “hold” rating to a “buy” rating in a report on Wednesday, July 15th. Morgan Stanley reaffirmed an “overweight” rating and issued a $220.00 price objective (up from $190.00) on shares of Arista Networks in a research report on Wednesday, August 5th. Finally, Wolfe Research reiterated an “outperform” rating and set a $175.00 target price on shares of Arista Networks in a research note on Wednesday, June 10th. Two analysts have rated the stock with a Strong Buy rating, twenty-two have given a Buy rating and one has given a Hold rating to the company. According to MarketBeat, the stock presently has an average rating of “Buy” and a consensus target price of $226.05. Read Our Latest Stock Report on ANET

Insider Activity at Arista Networks In other news, major shareholder Andreas Bechtolsheim sold 111,848 shares of the firm’s stock in a transaction on Thursday, August 6th. The stock was sold at an average price of $192.75, for a total value of $21,558,702.00. Following the transaction, the insider directly owned 109,833 shares in the company, valued at $21,170,310.75. This trade represents a 50.45% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Kenneth Duda sold 26,000 shares of Arista Networks stock in a transaction on Monday, July 20th. The stock was sold at an average price of $170.51, for a total value of $4,433,260.00. Following the completion of the sale, the insider directly owned 462,400 shares of the company’s stock, valued at $78,843,824. The trade was a 5.32% decrease in their position. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders sold 4,128,775 shares of company stock worth $767,332,289. Company insiders own 2.70% of the company’s stock.

Arista Networks Stock Up 0.3% Shares of NYSE ANET opened at $189.15 on Monday. The firm’s 50-day moving average price is $177.57 and its 200-day moving average price is $156.40. The company has a market cap of $238.56 billion, a PE ratio of 59.67, a PEG ratio of 1.95 and a beta of 1.60. Arista Networks, Inc. has a 52-week low of $114.52 and a 52-week high of $214.89.

Arista Networks (NYSE:ANET – Get Free Report) last released its quarterly earnings data on Tuesday, August 4th. The technology company reported $1.02 earnings per share for the quarter, beating the consensus estimate of $0.89 by $0.13. The firm had revenue of $3.04 billion during the quarter, compared to analysts’ expectations of $2.83 billion. Arista Networks had a net margin of 38.37% and a return on equity of 30.65%. The firm’s quarterly revenue was up 37.7% on a year-over-year basis. During the same period in the previous year, the company earned $0.73 earnings per share. Arista Networks has set its Q3 2026 guidance at 1.060-1.080 EPS. As a group, equities research analysts anticipate that Arista Networks, Inc. will post 3.7 EPS for the current fiscal year.

(Free Report)

Arista Networks, Inc is a technology company that designs and sells cloud networking solutions for large-scale data centers and enterprise environments. The company is best known for its high-performance switching and routing platforms, which are used to build scalable, low-latency networks for cloud service providers, internet companies, financial services, telecommunications, and enterprise IT. Arista’s offerings emphasize programmability, automation and telemetry to support modern, software-driven network architectures.

Central to Arista’s product portfolio is its Extensible Operating System (EOS), a modular network operating system that provides consistent programmability, stateful control and advanced visibility across the company’s hardware platforms.

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Bellars Harris Wealth Management LLC purchased a new position in Arista Networks, Inc. (NYSE:ANET – Free Report) during the second quarter, according to its most recent disclosure with the Securities and Exchange Commission. The fund purchased 32,869 shares of the technology company’s stock, valued at approximately $5,584,000.

Several other hedge funds and other institutional investors have also recently bought and sold shares of the stock. Lighthouse Financial Services Inc. ADV bought a new stake in shares of Arista Networks in the fourth quarter worth about $1,549,000. Bensler LLC bought a new stake in shares of Arista Networks in the 4th quarter worth approximately $6,350,000. QRG Capital Management Inc. increased its stake in shares of Arista Networks by 6.4% during the fourth quarter. QRG Capital Management Inc. now owns 169,613 shares of the technology company’s stock valued at $22,224,000 after buying an additional 10,217 shares during the period. Jefferies Financial Group Inc. increased its stake in shares of Arista Networks by 59.8% during the fourth quarter. Jefferies Financial Group Inc. now owns 17,621 shares of the technology company’s stock valued at $2,309,000 after buying an additional 6,591 shares during the period. Finally, Reaves W H & Co. Inc. bought a new position in shares of Arista Networks during the fourth quarter valued at approximately $3,058,000. Institutional investors own 82.47% of the company’s stock.

Arista Networks Stock Up 1.6% Shares of ANET stock opened at $202.05 on Tuesday. The business’s fifty day moving average is $175.00 and its 200 day moving average is $155.18. The stock has a market cap of $254.83 billion, a price-to-earnings ratio of 63.74, a PEG ratio of 2.06 and a beta of 1.60. Arista Networks, Inc. has a twelve month low of $114.52 and a twelve month high of $214.89.

Arista Networks (NYSE:ANET – Get Free Report) last announced its quarterly earnings data on Tuesday, August 4th. The technology company reported $1.02 EPS for the quarter, beating the consensus estimate of $0.89 by $0.13. Arista Networks had a return on equity of 30.65% and a net margin of 38.37%.The business had revenue of $3.04 billion during the quarter, compared to analyst estimates of $2.83 billion. During the same quarter last year, the firm posted $0.73 earnings per share. The company’s revenue for the quarter was up 37.7% on a year-over-year basis. Arista Networks has set its Q3 2026 guidance at 1.060-1.080 EPS. Equities research analysts expect that Arista Networks, Inc. will post 3.7 earnings per share for the current fiscal year. Wall Street Analyst Weigh In A number of research analysts have issued reports on ANET shares. Citigroup reissued a “buy” rating on shares of Arista Networks in a research report on Thursday, August 6th. Truist Financial raised their target price on shares of Arista Networks from $175.00 to $234.00 and gave the stock a “buy” rating in a research report on Wednesday, August 5th. Weiss Ratings lowered shares of Arista Networks from a “buy (b-)” rating to a “hold (c+)” rating in a research note on Wednesday, August 12th. Wolfe Research reiterated an “outperform” rating and set a $175.00 price target on shares of Arista Networks in a research report on Wednesday, June 10th. Finally, The Goldman Sachs Group reissued a “buy” rating and issued a $225.00 price target on shares of Arista Networks in a research note on Wednesday, August 5th. Two equities research analysts have rated the stock with a Strong Buy rating, twenty-two have given a Buy rating and one has assigned a Hold rating to the company. According to MarketBeat, Arista Networks presently has a consensus rating of “Buy” and a consensus target price of $226.05.

View Our Latest Research Report on Arista Networks

Insider Activity In other Arista Networks news, CEO Jayshree Ullal sold 767,029 shares of the company’s stock in a transaction dated Wednesday, August 5th. The shares were sold at an average price of $201.22, for a total value of $154,341,575.38. Following the sale, the chief executive officer owned 16,387,981 shares in the company, valued at approximately $3,297,589,536.82. This represents a 4.47% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, major shareholder Andreas Bechtolsheim sold 300,000 shares of the firm’s stock in a transaction that occurred on Wednesday, August 5th. The shares were sold at an average price of $203.30, for a total transaction of $60,990,000.00. Following the transaction, the insider directly owned 181,143,048 shares of the company’s stock, valued at $36,826,381,658.40. This represents a 0.17% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last quarter, insiders sold 4,335,168 shares of company stock valued at $798,637,629. 2.70% of the stock is owned by company insiders.

Arista Networks Company Profile (Free Report)

Arista Networks, Inc is a technology company that designs and sells cloud networking solutions for large-scale data centers and enterprise environments. The company is best known for its high-performance switching and routing platforms, which are used to build scalable, low-latency networks for cloud service providers, internet companies, financial services, telecommunications, and enterprise IT. Arista’s offerings emphasize programmability, automation and telemetry to support modern, software-driven network architectures.

Central to Arista’s product portfolio is its Extensible Operating System (EOS), a modular network operating system that provides consistent programmability, stateful control and advanced visibility across the company’s hardware platforms.

Read More Five stocks we like better than Arista Networks Commodities Are Booming, But These 3 ETFs Tell Different Stories 3 Active ETFs Making Big Moves in August This ETF Is Outperforming by Avoiding the S&P 500’s Biggest Problem Birkenstock Beats the Skeptics—But Not on EPS Want to see what other hedge funds are holding ANET? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Arista Networks, Inc. (NYSE:ANET – Free Report).

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SummaryArista Networks, Inc. delivered another strong quarter, beating revenue by 7.5% and EPS by 15%.ANET is a prime beneficiary of the ongoing AI-driven capital expenditure surge among hyperscalers.Despite consistent outperformance, ANET stock trades at ~50x forward earnings, reflecting high expectations for future growth.I remain neutral on ANET, as exceptional results and growth are already priced into the stock's current valuation.Looking for a helping hand in the market? Members of Cash Flow Club get exclusive ideas and guidance to navigate any climate. Learn More » Sundry Photography/iStock Editorial via Getty Images

Article Thesis Arista Networks, Inc. (ANET) reported strong results for its fiscal second quarter. The company is a big beneficiary of the ongoing AI capital expenditures boom, and as long as hyperscalers

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Key Takeaways Arista Networks launched new AI networking platforms for larger, more efficient AI clusters. Arista Networks expects at least $3.6 billion in 2026 AI revenue as Ethernet AI adoption expands. Arista Networks says AI fabric customers now exceed 100 and is expanding into scale-across AI networking. Arista Networks (ANET - Free Report) recently unveiled a new generation of AI networking platforms aimed at supporting increasingly complex AI infrastructure. The launch builds on the company's growing AI networking franchise and reflects its strategy of delivering high-performance Ethernet solutions that span scale-up, scale-out and scale-across AI deployments. While the new products expand Arista's long-term addressable market, investors will be watching customer adoption and execution to determine whether the company's AI momentum can continue. 

How the New ANET Platform Targets AI ClustersArista's latest product introductions are designed to address the networking requirements of next-generation AI clusters. The company introduced the 7060XE7 Series, a family of 1.6-terabit Etherlink AI fabric platforms capable of delivering up to 100 terabits per second of system bandwidth. The new portfolio also includes liquid-cooled options, helping customers improve power efficiency while supporting larger AI deployments. According to management, the platforms are optimized for scale-up, scale-out and scale-across AI networking architectures, enabling customers to build increasingly powerful AI infrastructure while reducing networking bottlenecks. 
 

Management also highlighted the company's flagship 7800 AI Spine platform, which enables customers to scale AI networks without adding additional networking tiers. These capabilities position Arista to support both traditional AI training clusters and geographically distributed AI environments. 

Why Ethernet AI Matters for AristaEthernet continues gaining traction as AI networking architectures evolve, creating a significant opportunity for Arista. The company expects AI-related revenue of at least $3.6 billion in 2026, supported by expanding adoption of Ethernet-based AI fabrics. Management noted that cumulative AI fabric customers now exceed 100, up from only four to five customers in 2024, highlighting the rapid pace of adoption.

Beyond traditional scale-out networking, Arista is expanding into scale-across AI networking, which connects geographically distributed AI clusters. Management estimates this market could reach $15-$20 billion by 2030, with scale-across representing roughly 30% of the company's targeted AI revenue opportunity in 2026. This broadens Arista's addressable market while reinforcing Ethernet's growing role in AI infrastructure.

How Software Strengthens the AI OfferingHardware innovation is only part of Arista's AI strategy. The company's Extensible Operating System (EOS) provides a unified software platform across AI fabrics, cloud data centers and enterprise networks, helping customers simplify operations while improving scalability. During the earnings call, management highlighted several software innovations that differentiate its AI networking platform.

Smart System Upgrade (SSU) enables software upgrades without disrupting network operations, an important capability for AI clusters that require maximum uptime. Multipath Reliable Connection (MRC) improves AI training efficiency by allowing data flows to use multiple network paths simultaneously, while Segment Routing over IPv6 (SRv6) dynamically redirects traffic to avoid congestion and maximize network utilization. Combined with EOS automation and programmability, these technologies help improve AI cluster performance and operational efficiency.

What Investors Should Watch NextThe success of Arista's latest AI platforms will ultimately depend on customer adoption and execution. Investors should monitor the pace of AI platform deployments, expansion of the AI fabric customer base and management's ability to convert design wins into sustained revenue growth. Manufacturing readiness, supply-chain execution and timely product deliveries will also remain important as customers continue investing heavily in AI infrastructure.

Competition remains another key consideration. Arista competes with established networking vendors such as Cisco Systems, Inc. (CSCO - Free Report) and NVIDIA Corporation (NVDA - Free Report) , both of which are investing heavily in AI networking technologies. Cisco is expanding its Ethernet-based AI infrastructure portfolio, while NVIDIA continues strengthening its high-performance networking offerings for AI data centers. Continued product innovation and software differentiation will therefore be essential for Arista to maintain its leadership position in Ethernet-based AI networking.

How the Zacks Signals Frame the OpportunityANET currently carries a Zacks Rank #2 (Buy), reflecting favorable earnings estimate revisions following the company's strong operating performance. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The stock also has a Growth Score of A, underscoring its robust earnings and revenue expansion prospects driven by AI networking demand. At the same time, its Value Score of F indicates that investors are assigning a premium valuation to those growth opportunities. Meanwhile, the Momentum Score of C suggests more balanced trading characteristics after the recent rally, while the VGM Score of C reflects an overall balanced profile. Together, these signals reinforce that Arista remains a compelling AI growth story, although continued execution will be critical to justify its premium valuation.

Key Takeaways Arista now expects 2026 revenues of about $12.6B, up 40%, after its third outlook raise.Added suppliers and capacity lifted shipments, while purchase commitments rose to $9.7B.Etherlink customers topped 100 as 1.6-terabit platforms enter trials before a 2027 production ramp. Arista Networks, Inc. (ANET - Free Report) used its second-quarter call to emphasize that improved component access is converting strong demand into higher shipments across artificial intelligence (AI), data center, campus and routing.

Management raised its 2026 revenue outlook for the third time this year, while focusing on execution, customer mix and demand beyond AI fabrics.

ANET Raises Its 2026 Revenue OutlookChairperson and chief executive officer Jayshree Ullal said Arista now expects 2026 revenues of approximately $12.6 billion, representing 40% growth. The outlook is $1.1 billion above the May projection and $2.1 billion above the prior Analyst Day goal.

Chief financial officer Chantelle Breithaupt guided third-quarter revenues to approximately $3.3 billion, with a non-GAAP operating margin of 48% to 49% and non-GAAP earnings of $1.06 to $1.08 per share.

Second-quarter revenues reached $3.04 billion, ahead of the Zacks Consensus Estimate of $2.83 billion and up 37.7% year over year. Non-GAAP earnings rose 39.7% to $1.02 per share, beating the consensus estimate of $0.89.

Arista Expands Supply CommitmentsPresident and chief operating officer Todd Nightingale said the company added suppliers, improved delivery terms and expanded manufacturing and distribution capacity. Arista now works with three contract manufacturers and three distribution facilities across the United States, Asia and Mexico.

Management secured memory supply for 2026 and extended visibility into 2027 across DDR4, DDR5 and NAND. It also established a liquid-cooling supply chain for next-generation AI systems.

Purchase commitments rose to $9.7 billion from $8.9 billion in the first quarter and about $3.6 billion a year earlier. Ullal cautioned that industry constraints could persist until 2028, despite Arista's progress.

ANET Builds Out Its AI Fabric AdvantageUllal said cumulative Etherlink customers now exceed 100, up from four to five customers discussed in 2024. The company is extending its portfolio with the 7060XE7, which supports 1.6-terabit throughput, 100 terabits of system capacity and liquid-cooling options.

Co-founder, President and chief technology officer Kenneth Duda highlighted Smart System Upgrade, Multipath Reliable Connection and SRv6-based routing. Management framed those capabilities as tools to reduce downtime, avoid congestion and improve accelerator utilization.

Arista expects 1.6-terabit platforms to remain in trials during the second half of 2026, with production ramping in 2027. Ullal said initial evaluations involve a small number of large customers.

Arista Sees Broader Growth Beyond AIA UBS analyst questioned why the higher annual outlook did not include a larger stated AI or campus target. Ullal responded that all product sectors should grow, while management retains flexibility to prioritize shipments based on supply.

A Raymond James analyst pressed on the incremental $1.1 billion. Ullal pointed to core data center front-end systems, enterprise demand, routing, campus and AI as contributors.

Breithaupt also cited new customer wins, international expansion and land-and-expand activity between campus and data center deployments. The guidance increase was broader than a single product cycle.

ANET Defends Its System-Level ApproachAn Evercore ISI analyst asked whether rising AI-network complexity strengthens integrated systems relative to white-box alternatives. Ullal said simple deployments can still use lower-cost white-box equipment, but larger scale-out and scale-across networks require more software, reliability and traffic engineering.

A Morgan Stanley analyst asked why newer cloud operators choose Arista's blue-box systems. Ullal emphasized operating efficiency, EOS feature depth and reliability, while acknowledging that large customers with extensive engineering staffs may continue using white-box products.

A Wells Fargo analyst asked about customer concentration. Ullal said Microsoft and Meta remain key partners and expects one, and potentially two, customers to represent at least 10% of revenue as shipments scale.

Arista Keeps Execution at the CenterManagement's tone remained confident on demand but measured on supply. Breithaupt said customer visibility remains about two quarters and the annual outlook reflects supply the company is confident it can secure.

The call left Arista focused on converting commitments into shipments, scaling new AI platforms and broadening growth across established networking categories without relaxing operating discipline.

Zacks Signals Show Mixed Style SupportANET carries a Zacks Rank #2 (Buy), a favorable indicator tied to earnings-estimate revisions over the next one to three months. Its Growth Score of A is the strongest style signal, while the Value Score of F and Momentum Score of D indicate weaker positioning on those dimensions.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The VGM Score of C shows a middle-range combined profile rather than the A or B scores that pair most strongly with a top Zacks Rank. The Zacks Rank can change as analysts revise estimates following the newly reported results.

Arista Networks (NYSEANET) beat analyst estimates for second-quarter financial results Tuesday after market close.

• Arista Networks stock is at critical resistance. What’s driving ANET to record levels?

Here are the key highlights.

Arista Networks Q2 EarningsArista Networks reported second-quarter revenue of $3.04 billion, up 37.7% year-over-year. The revenue total beat a Street consensus estimate of $2.82 billion, according to data from Benzinga Pro.

This marked the first $3 billion or more revenue quarter for the company in history.

Earnings per share for the quarter were $1.02, beating a Street consensus estimate of 89 cents per share.

"Our second quarter 2026 reflects strong, broad-based growth, with revenue up 37.7% and EPS up 39.7%. This performance underscores the strength of our market position and the continued dedication of our global team," Arista Chief Financial Officer Chantelle Breithaupt said.

What’s Next for AristaThe company recently introduced 1.6 Tbps AI fabric platforms, optimized for "scale-up, scale-out, and scale-across networks."

"As we deliver our first $3 billion quarter in Q2 2026, it is clear that our Arista 2.0 platform strategy is compelling," Arista Networks CEO Jayshree Ullal said. "Customers see networking as the central nervous system for infrastructure from the client to campus to data and AI centers."

Guidance from Arista calls for third-quarter revenue of $3.3 billion, higher than a Street estimate of $2.94 billion, according to Benzinga Pro.

The company expects third-quarter adjusted EPS in a range of $1.06 to $1.08, versus a Street estimate of 91 cents per share.

Arista Stock Price ActionArista stock is up 7.68% to $205.51 in after-hours trading Tuesday versus a 52-week trading range of $114.52 to $194.35. The stock is at all-time highs in after-hours trading and looks to maintain the momentum heading into Wednesday.

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Key Takeaways Arista launched AI-driven ETM for VeloCloud SD-WAN with integrated zero trust security.ANET adds firewall, threat prevention, segmentation, Geo-IP and DNS filtering in one platform.Arista integrates AVA to explain policies and simulate traffic before deployment to reduce errors. Arista Networks, Inc. (ANET - Free Report) is strengthening its enterprise networking portfolio with the launch of artificial intelligence (AI)-driven Edge Threat Management (ETM) for its VeloCloud SD-WAN platform. The new offering integrates zero trust security directly into the SD-WAN edge, enabling enterprises to combine networking and security on a single unified platform while simplifying branch deployments.

Arista's software-based ETM upgrade adds advanced firewall protection, leading to threat prevention, zone-based segmentation, Geo-IP filtering and DNS filtering to the VeloCloud SD-WAN solution. Managed through the VeloCloud Orchestrator, the solution provides centralized visibility and a common policy engine, allowing businesses to simplify security management and enforce consistent policies across branch locations.

The company's new platform also integrates Arista Autonomous Virtual Assist (AVA) to enhance security operations with AI-powered intelligence. Through Ask AVA features such as Policy Explainer and Traffic Simulation, it helps administrators understand complex security rules in simple language and evaluate the impact of policy changes before deployment, reducing configuration errors and improving operational efficiency.

As enterprises increasingly prioritize unified networking and security, the latest launch expands Arista's VeloCloud capabilities while reinforcing its strategy of delivering AI-driven networking solutions for enterprise branch environments.

How Are Competitors Advancing in Enterprise Networking?Arista faces competition from Cisco Systems, Inc. (CSCO - Free Report) and NVIDIA Corporation (NVDA - Free Report) . Cisco has expanded its enterprise networking portfolio to meet the growing demand for AI and cloud infrastructure. The company offers advanced switches, routers, wireless networking and security solutions that improve network performance and reliability. Cisco's focus on software-defined and cloud-managed networking helps enterprises modernize their IT infrastructure.

NVIDIA has strengthened its enterprise AI business with new AI hardware, software and networking solutions. The company is helping businesses build and run AI applications through its AI platforms and computing systems. NVIDIA is working with cloud providers and enterprise customers to support the growing adoption of AI across industries.

ANET’s Price Performance, Valuation & EstimatesShares of Arista have gained 54.5% over the past year against the industry’s decline of 14.7%.

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From a valuation standpoint, Arista trades at a forward price-to-sales ratio of 16.98, above the industry average of 3.96.

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Earnings estimates for 2026 have increased 0.8% to $3.64 over the past 60 days, while the same for 2027 has also increased 0.2% to $4.39.

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Arista currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

There are plenty of artificial intelligence (AI) stocks grabbing investors' attention these days, and many of them are semiconductor designers and manufacturers. But while the AI data center boom is driving many chip stocks higher, there are other ways to play the artificial intelligence supercycle.

Arista Networks (ANET 3.78%) is a prime example. The company's networking equipment and software help the biggest tech companies run their AI data centers -- and it could benefit from infrastructure spending for years to come.

Image source: Getty Images.

Why Arista stands out in the AI crowd Arista Networks sells data center networking hardware and software that enables tech companies to manage their data center systems. That's become a very good business to be in, considering that the largest technology players are spending an estimated $750 billion on AI infrastructure this year alone.

While Arista has most of its business tied to a handful of large companies -- including Microsoft and Meta -- it's somewhat protected from this concentration. Once a company begins using Arista's hardware and software, it becomes difficult to switch. AI data center systems are complex and costly, and hardware and software upgrades are expensive.

What's more, most of its customers don't want to switch, with independent data showing that 94% of them are strongly positive about Arista.

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Arista is in great financial shape Arista reported its first-quarter 2026 results in May, and investors were initially disappointed by the management's gross margin guidance of between 62% to 64% for 2026. Arista's gross margins for 2025 were 64.1%, but investors were hoping they would expand further.

The slight margin decline comes as memory prices have skyrocketed over the past few years due to a supply shortage driven by AI data centers. Arista uses memory in its hardware systems, so it's feeling the pricing pressure too. It's worth noting that this isn't an Arista-specific issue. Apple just raised prices on many of its devices due to rising memory costs.

The bigger picture -- and what potential investors should focus on -- is how Arista is benefiting from surging AI data center demand. The company's sales jumped 35% to $2.7 billion in the first quarter, and non-GAAP (generally accepted accounting principles) earnings per share rose nearly 32% to $0.87.

What's more, Arista has no debt, it generated $1.64 billion in free cash flow in the first quarter, and management expects sales to rise 28% in 2026 to $11.5 billion.

In short, Arista is in great financial shape and continues to benefit from a rapidly expanding AI market.

If there's one concern for potential buyers of Arista Networks, it's that its stock currently has a trailing price-to-earnings (P/E) ratio of 56, above the tech sector average of about 41.

But with strong sales and earnings growth, high gross margins, and strong free cash flow, there's little to worry about with Arista.

Chris Neiger has positions in Apple. The Motley Fool has positions in and recommends Apple, Arista Networks, Meta Platforms, and Microsoft. The Motley Fool has a disclosure policy.

Key Takeaways CIEN raised fiscal 2026 revenue guidance, supported by AI infrastructure and optical networking demand.CIEN saw strong growth in service provider revenue and expanding hyperscaler engagements.ANET lifted its 2026 revenue outlook but faces supply constraints and gross margin pressure. Ciena Corporation (CIEN - Free Report) and Arista Networks, Inc. (ANET - Free Report) are among the key beneficiaries of the growing investments in artificial intelligence (AI) infrastructure, as organizations increasingly require advanced networking solutions to support large-scale AI workloads. The rapid expansion of AI training, inference and data-intensive applications is driving demand for high-performance connectivity across data centers, cloud environments and wide-area networks. As a result, networking providers are seeing rising opportunities to deliver the infrastructure needed to move, manage and process massive amounts of data efficiently.

Both companies are capitalizing on these favorable industry trends through their respective technology portfolios. Arista Networks is strengthening its position in AI and cloud networking with its high-speed Ethernet switching and AI fabric solutions, while Ciena is benefiting from growing demand for optical networking, interconnect technologies and data center connectivity infrastructure. With AI-related investments continuing to accelerate across hyperscalers, cloud providers and enterprises, both companies are well-positioned to participate in the long-term growth of the AI networking market.

Let’s analyze their fundamentals, growth opportunities, market challenges and valuation to assess which one presents a stronger investment opportunity.

The Case for CIENCiena is benefiting from AI-driven demand across cloud and service provider markets, supported by its technology leadership, deep customer relationships and broad portfolio spanning systems, interconnects, software and services. In the second quarter, revenue increased, adjusted gross margin expanded and adjusted earnings per share nearly quadrupled. Management stated that a strong and growing backlog, combined with the company's leading technology portfolio, provides strong visibility and positions Ciena to capture long-term opportunities across WAN and data center networking.

The company is also gaining momentum from rising investments by hyperscalers and service providers in network infrastructure. Management noted that customers are prioritizing high-capacity, low-latency and high-speed connectivity to support AI model training, data ingestion and inference workloads. Ciena's addressable market is expected to nearly double to approximately $50 billion by 2029, driven by growth in both traditional WAN markets and high-growth data center opportunities. Service provider revenue increased 28% year over year, while revenue from service providers in India more than doubled, reflecting strong demand for managed optical fiber network deployments.

Ciena continues to benefit from demand for its latest networking solutions and expanding customer engagements. The company announced the industry's first multi-rail order for its RLS Hyper-Rail platform from a leading hyperscaler and is engaged in discussions with multiple additional hyperscalers, neoscalers and service providers. Its DCOM solution contributed to 88% year-over-year growth in the Routing and Switching segment, while initial orders from a second hyperscaler and lab qualifications with a third customer further broadened the customer base. The company also secured a new hyperscaler win for its coherent modules and remains on track to more than double pluggable revenue compared with 2025.

Ciena is further benefiting from customer co-creation initiatives and strong operational execution. Management stated that customers increasingly involve the company early in the development of new architectures, helping improve road map decisions, increase win rates and provide greater demand visibility.

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Management expects third-quarter fiscal 2026 revenue of $1.625 billion, plus or minus $50 million. The company also increased its fiscal 2026 revenue guidance to $6.3 billion, plus or minus $100 million, which implies roughly 32% year-over-year growth at the midpoint. Management attributed the stronger outlook to ongoing investments in AI infrastructure and continued robust demand for its optical networking solutions.

However, Ciena continues to operate in a supply-constrained environment where demand exceeds available supply. As a result, the company is making additional capital and operating expense investments to secure future manufacturing capacity and strengthen supply-chain resilience. Management also cited ongoing constraints in modem components and laser pumps used in amplifiers and line systems. In addition, inflationary pressures and higher variable compensation associated with stronger business performance are increasing operating expenses, prompting further investments to support anticipated future demand.

The Case for ANETArista is gaining from the rapid expansion of AI infrastructure and cloud networking demand, as enterprises, hyperscalers and AI providers increasingly deploy large-scale training and inference workloads. The company delivered strong first-quarter 2026 results, with revenue rising 35.1% year over year to $2.71 billion, exceeding guidance. Management highlighted growing traction for its cloud and AI networking strategy, supported by increasing adoption of its high-speed Ethernet solutions and leadership position in high-speed switching. Reflecting this momentum, Arista raised its 2026 revenue outlook to approximately $11.5 billion and increased its AI fabrics revenue target to $3.5 billion, indicating expectations for continued growth in AI-related deployments.

The company continues to benefit from expanding AI networking opportunities through its scale-out and scale-across architectures. The company reported more than 100 cumulative customers deploying 800-gigabit Ethernet solutions and expects 1.6-terabit deployments to reach production scale in 2027. Management noted strong demand for its Etherlink portfolio, AI fabric offerings and networking software, which support diverse AI accelerators and increasingly complex AI workloads. The company is also seeing growing adoption among cloud providers, neocloud operators and AI infrastructure customers, supported by the scalability, reliability and observability of its EOS platform.

Arista Networks also demonstrated strong financial and operational execution. Arista generated approximately $1.69 billion in operating cash flow, the highest in its history, and ended the quarter with $12.35 billion in cash, cash equivalents and marketable securities. Management highlighted continued investments in innovation, including next-generation AI networking products, advanced optics technologies such as XPO, and enterprise expansion initiatives, positioning the company to address future growth opportunities.

Despite strong demand trends, Arista is facing industry-wide supply constraints across wafers, silicon chips, CPUs, optics, memory and other key components. Management stated that demand is currently outpacing supply and expects these challenges to persist for the next one to two years. To secure supply and support customer deployments, the company has entered into multiyear purchase commitments and is incurring higher procurement costs, which may continue to constrain shipment capacity and operational flexibility.

The challenging supply environment is also creating pressure on profitability. Gross margin declined to 62.4% from 63.4% in the previous quarter, primarily due to customer mix and elevated component costs. Management expects ongoing gross margin pressure as it absorbs higher expenses for memory, silicon and other critical inputs while prioritizing supply continuity for customers.

CIEN vs. ANET Share Price PerformanceOver the past six months, CIEN shares have gained 91.6%, while Arista has increased 33.5%.

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Valuation for CIEN & ANETIn terms of Price/Book, CIEN shares are trading at 22.53X, higher than ANET’s 16.3X.

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How Do Estimates Compare for CIEN & ANET?Analysts have significantly revised their earnings estimates upward for CIEN’s bottom line for the current year.

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For ANET, there have been marginal upward revisions for the current year.

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CIEN or ANET: Which is a Better Pick?While CIEN sports a Zacks Rank #1 (Strong Buy) at present, ANET has a Zacks Rank #3 (Hold). Consequently, in terms of Zacks Rank and valuation, CIEN seems to be a better pick at the moment.

You can see the complete list of today’s Zacks #1 Rank stocks here.